Taxation of business entities.

Business Taxation - Deciding where to incorporate.?

• I live in NJ and my biz associate lives in VA. I am a citizen. He is a resident alien from 'country G'. We will, if necessary, create a USA corp or LLC to purchase a common commodity outside the USA for direct shipment to 'country G'. We are able to also set up a company in 'country G' under his Identity, since he is a citizen there. We want our principal banking to be in the USA at a major bank, but will prefer if it can be an account of the foreign company. 1. Would we be considered as doing business in the USA and therefore taxed here only because we live here and have banking here -- although the commodity is purchased, shipped and delivered all offshore? 2. If we are to be taxed here, will we be able to retain more corporate profit by incorporating in a state with no corp tax (NV/SD/WA/WY). The nature of the business is: Seed money (borrowed) is used each month to purchase and ship commodity and is returned to our bank (with some profit) when the shipment is sold... so, I suppose the profit could then be moved to a second account from which we can pay ourselves, the loan costs and business expenses, while the rest is used each month to purchase the next shipment. 3. Neither of us has much assets now. We expect to remain a small business in personnel, but large in profit. WHAT form of corporation makes most sense: C, S, LLC if it makes much difference. Profit should exceed 3MM/yr. (We are not looking for customers, but are seeking legal and accounting relationships if anyone has specific expertise. Text me via this blind page, if you wish: http://labhamdiam.info/collect/textme.htm )

• Answer:

  Hello! Unfortunately your question is too complex to be able to answer in the forum. But, what I can tell you is that you need to speak both to a Business Law attorney and an Accountant, and make sure that they communicate with one another during your formation. Typically if you are not "doing business" in the United States you may still want to form an entity here to protect your assets, which I presume are largely in the United States, and to have legal grounds to sue and enforce contracts under the entity name in United States courts. There are definitely benefits to forming LLCs and Corps in Nevada. I am a Nevada and California barred attorney, and have formed many entities in both jurisdictions, but it is hard to answer your question as it applies to your specific scenario without treading on the fine line of giving legal advice in a open forum. Good luck with your venture! Taleed El-Sabawi Business Law Attorney Kersey & Sabawi, PC www.kerseysabawi.com